Vascular dementia (VD) is a degenerative cerebrovascular disorder associated with progressive cognitive decline. Previous reports have shown that 7,8-dihydroxyflavone (7,8-DHF), a well-known TrkB agonist, effectively ameliorates cognitive deficits in several disease models. Therefore, this study investigated the protective effects of 7,8-DHF against 2-VO-induced VD. VD was established in rats using the permanent bilateral carotid arteries occlusion (two-vessel occlusion, 2-VO) model. 7,8-DHF (5, 10, and 20 mg/kg) and Donepezil (10 mg/kg) were administered for 4 weeks. Memory function was assessed by the novel objective recognition task (NOR) and Morris water maze (MWM) tests. Inflammatory (TNF-α, IL-1β, and NF-kβ), oxidative stress, and apoptotic (BAX, BCL-2, caspase-3) markers, along with the activity of choline acetylcholinesterase (AChE) was assessed. p-AKT, p-CREB, BDNF, and neurotransmitter (NT) (GLU, GABA, and ACh) levels were also analyzed in the hippocampus of 2-VO rats. Our results show that 7,8-DHF effectively improved memory performance and cholinergic dysfunction in 2-VO model rats. Furthermore, 7,8-DHF treatment also increased p-AKT, p-CREB, and BDNF levels, suppressed oxidative, inflammatory, and apoptotic markers, and restored altered NT levels in the hippocampus. These findings imply that 7, 8-DHF may act via multiple mechanisms and as such serve as a promising neuroprotective agent in the context of VD.